Wilmar International Limited (WIL) reported 2Q15 revenue easing 12% YoY to US$9284.8, mainly due to lower commodity prices; but gross margin was stable at 7.7% (versus 7.4% in 1Q14) even though gross profit slipped 9% to US$712.1m. Reported net profit rose 18% to US$201.8m, while core earnings jumped 19% to US$193.6m.

1H15 revenue slipped 10% to US$1869.1m, meeting 42% of our full-year forecast, while reported net profit climbed 33% to US$443.0m; core earnings rose 21% to S$457.0m, meeting 37% of our FY15 estimate. WIL also declared an interim dividend of S$0.025/share, versus S$0.02 last year.

Still, WIL believes that it has achieved "satisfactory" results in 2Q15 despite the tough conditions and lower CPO prices; it is also cautiously optimistic that 2H15 performance will be satisfactory. We will have more after the analyst briefing later.

For now, we maintain our BUY rating but place our S$3.50 fair value under review.

Source: OCBC Research - 6 Aug 2015